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FTC wins case against payday lender

June 6, 2014 – A U.S. district judge ruled in favor of the Federal Trade Commission in its suit against AMG Services for deceptive payday lending practices used with more than 5 million consumer loans.

FTC sued the company because of its frequent imposition of undisclosed charged and inflated fees, which could leave a borrower with as much as three times as much debt as the amount borrowed. In its release, FTC cited a “typical example” of a borrower being told by the company that a $500 loan would cost $650 to repay, but then being charged $1,925.

In March, the judge ruled in favor of FTC in the same case after the defendants claimed that affiliation with Native American tribes kept them outside the agency’s jurisdiction – a claim the judge ruled was incorrect under the Federal Trade Commission Act.

Last year, the FTC reached a partial settlement with the same company preventing it from continuing to use threats of lawsuits or arrests as a tactic to collect debt. Damages in the latest ruling have yet to be imposed.